Spotlight on economy: Focus on Fed’s ‘tapering’ plans

Bloomberg

For once, a Bernanke speech isn’t the focus

Economists will scour the minutes of the Federal Reserve’s June meeting to gauge individual views of the central bankers on the timing of the so-called tapering process. The Fed has been buying $85 billion in government and mortgage bonds each month as a temporary measure to keep interest rates ultra low and boost the U.S. economy.

The Fed will release the minutes for the June 18-19 meeting at 2 p.m. Eastern on Wednesday.

At the last Fed meeting, the committee gave Chairman Ben Bernanke permission to lay out a possible roadmap for the beginning of the end to the controversial bond-buying program. Bernanke said the tapering could start later this year and end about the middle of 2014.

In March, the last time the Fed gave a detailed breakdown, most officials said asset purchases would continue through mid-year and a “number” thought it would be appropriate to maintain the current pace through the third quarter. Only a few saw the current $85 billion-per-month pace lasting until the end of the year.

Later in the day, Bernanke will speak to a conference of prominent economists to discuss the Fed’s first 100 years. His speech is expected to start shortly after U.S. markets close, at about 4:10 p.m. He will take questions as well.

Earlier Wednesday, the government at 10 a.m. will issue the wholesale inventories report for May. Wholesale inventories rose a preliminary 0.2% in April.

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